Implications of low-carbon hydrogen production on renewable energy systems webinar, 30 March 2023, Paris, CEFIM, OECD

1. Japan’s Vision and Actions toward
Hydrogen Economy
March 2023
Hydrogen and Fuel Cells Strategy Office
Agency for Natural Resources and Energy
METI, JAPAN

2.  Supply & Demand volume:
Current（Approx. 2Mt） → 2030（Approx. 3Mt） → 2050（Approx. 20Mt）
 Hydrogen cost:
Current（JPY100/Nm3） → 2030（JPY30/Nm3） → 2050（Less than JPY20/Nm3）
⚫ The first country to have formulated a national hydrogen strategy.
⚫ The Prime Minister set “2050 carbon neutral” declaration.
⚫ Positioned hydrogen as one of the priority areas in the Green Growth Strategy.
⚫ Aim to expand the volume of hydrogen introduction and to achieve cost reduction through the
governmental support including Green Innovation fund projects and investments towards
green transformation (GX).
Japan’s Strategies & Policies towards Hydrogen Economy
Situation and status of strategy formulation
Targets (Set in the Basic Hydrogen Strategy on Dec. 26, 2017)
2017
Basic Hydrogen
Strategy
2020
PM's 2050 CN
Declaration
Green Growth Strategy
2021
Green Innovation Fund
Revised Strategic
Energy Plan
2023~
GX investment
Clean Energy Strategy
station retail price (=USD2.6/kg-H2*) (=USD1.7/kg-H2*)
*USD1=JPY130 1

3. FY2030
Approx. 930-940 TWh
Approx. 18%
Approx. 6%
Approx. 37%
Approx. 32%
Approx. 1,024 TWh
LNG
Coal
Oil, etc.
Approx. 36-38%
Approx. 1%
Approx. 20%
Approx. 20-22%
Non-fossil
Approx. 24%
Non-fossil
Approx. 59%
Fossil
Approx. 41%
Fossil
Approx. 76%
FY2019
Approx. 2%
Approx. 19%
Approx. 7%
Nuclear
Renewables
Hydrogen/Ammonia
2
⚫ The Strategic Energy Plan (revised in 2021) shows updated power
generation mix target toward FY2030.
⚫ It requires improvement of more energy efficiency and renewable energy
deployment. In addition, it allocates 1% for hydrogen and ammonia in
2030 power generation mix.
Power Generation Mix in 2030

4. Hydrogen Supply and Demand (Rough Roadmap)
3
Short term (-2025) Mid term (-2030) Long term (-2050)
Actual･Target
Volume / Sectors Approx. 2 mil ton Up to 3 mil ton Approx. 20 mil ton
Transportation
FCV, FC Bus +
Introduction of FC Trucks
+ FC Ships etc. + Aircraft etc.
Power Generation
Stationary fuel-cells,
Small gas turbines etc.
Commercialization of
large size power
generation
+ Using as the flexibility of
power system
Industrial Sector R&D, Demonstration phase
(steel and chemical production process etc.)
H2 reductant steelmaking,
green chemical etc.
Heat Demand
(industrial/commercial
/residential)
Demonstration phase / Commercialization in
limited areas
Expansion of scale
(through cost reduction and
infrastructure development)
Short term (-2025) Mid term (-2030) Long term (-2050)
Actual・Target
Volume / Sources
Approx. 2 mil ton Up to 3 mil ton Approx. 20 mil ton
Existing Source
(Byproduct, etc.)
Major supply source
Transition to Clean Hydrogen
(Utilization of CCUS, etc.)
Import
(Blue, Green, etc.)
Demonstration phase
Establishment of global
hydrogen supply chain
on commercial basis
Expansion of scale
through diversification
New Domestic
Supply Source
(Electrolysis, etc.)
Demonstration phase
Transition to
commercial phase
Expansion of scale
(incl. introduction of new
technologies)
Supply
side
Demand
side

5. Hydrogen Production: Electrolyser
4
Alkaline electrolyser plant in Fukushima
Source: Toshiba Energy Systems & Solutions Corporation Source: Yamanashi Pref
⚫ Demonstration project in Fukushima using large-scale electrolyser already in operation in 2020 (10MW).
⚫ Currently, a larger demonstration project※ is underway to further increase size, improve operation and
reduce costs.
※Fund: up to 0.7 billion USD
PEM electrolyser plant in Yamanashi

6. Global Hydrogen Supply Chain
5
Liquefied Hydrogen
MCH (Methylcyclohexane)
Liquefied Hydrogen Carrier
completed the world's first maritime
transport (AU→JPN) in February
2022.
MCH as the hydrogen carrier in the
demonstration project was completed
in June 2020. (Brunei-JPN)

7. ⚫ Currently approx. 7,600 FCVs have been sold and 180 hydrogen refueling stations (HRS) installed (as
of January 2023).
⚫ FC trucks and FC trains are under demonstration.
⚫ Hydrogen and ammonia (for FCs/engines) are expected to be used in ships and airplanes in the future.
Hydrogen refueling station: 179 locations
New "MIRAI" launched at the end of 2020
7,648 vehicles
Hydrogen Use in Transportation Sector
FCV and Hydrogen station
Widespread use of commercial FC vehicles
・Diversification of hydrogen stations
◆Laying of pipelines
from hydrogen ST to
Woven City (where
hydrogen was used for
consumer use)
◆FC generator installed at
hydrogen stations in the
case of power outage
Widespread use of commercial FC vehicles
Diversification of hydrogen stations
Fukushima Prefecture and TOYOTA
are preparing to start FC truck
demonstration project including
refueling timing management.
Small size, short distance
→ Fuel Cell Ships
Large size, long distance
→ Hydrogen Gas-
Fueled Vessels
For further use (examples)
【Major Players in Japan】
• HRS：Air Liquide Japan G.K., ENEOS
Corporation, Iwatani Corporation, etc.
• FCV：Toyota, Honda, etc.
• FC Truck：
CJPT(Commercial Japan Partnership Tech
nologies)<Toyota, Isuzu, Hino, Suzuki,
Daihatsu, etc.>
6

8. 1MW class
Achieving combined heat and power
supply to urban areas using
hydrogen exclusively in 2018.
High-efficiency
dedicated hydrogen
single fuel power
generation is under
progress.
500 MW class
Achieving hydrogen co-firing
rate of 30%vol in 2018.
Single fuel power
generation is under
progress.
Hydrogen power generation facility (hydrogen CGS)
constructed on Port Island in Kobe City
Combustor
The image of gas turbine
⚫ Japan has been a world leader in hydrogen power generation technology. Demonstration projects are
underway for both large and small turbines.
⚫ Hydrogen boiler has already had deployment case. Some companies, such as tire-manufacture,
are considering deploying hydrogen boiler to their factory for carbon neutral.
Hydrogen Use in Power sector and in Industrial sector
7
Hydrogen Boiler
Hydrogen boiler
deployment case
Source: Miura co., Ltd.
Hydrogen
Boiler Steam
Tire-manufacture is considering to deploy
hydrogen boiler at their factory line. Tire
Vulcanization

9. Hydrogen Hub/Valley
8
IWATANI and SOMA Gas Group have
started to feasibility study for blending
hydrogen into their gas services.
H2 Tank
Simulation
Hydrogen
Burner
Electrolysis
Degreasing
process
Electric
Heater
Brazing
Onsite Hydrogen production
Air
Afterburner
Development of electrolysis with renewable
energy at Fukushima Hydrogen Energy
Research Field (FH2R)
Hydrogen
Boiler
Steam
Tire
Vulcanization
Sumitomo Rubber Industries has started
demonstrate project for deployment of
hydrogen boiler at their factory line.
Fukushima Prefecture and Namie Town are
using hydrogen and fuel-cell for public facilities.
Air
Air H2
H2
Pipeline
Pipeline
H2
H2
Community Gas
Apartment
Apartment area
PA13A gas area
DENSO has started demonstration
project for electric heaters and hydrogen
burners in their production line
Fukushima
Fukushima Renewable Energy
Institute, AIST (FREA) conducts RD&D
related to hydrogen and supports the
technological development of companies
and universities.

10. ⚫ Aim to develop large-scale and resilient hydrogen supply chains (both domestic and international) with
a view to expanding the supply volume and reducing the supply cost.
⚫ Aim to deploy and induce more than 7 trillion yen (=$53.8 billions*) of public and private investment.
Price Gap ＝ Strike Price ー Reference Price
Agreed price for supply costs, including production,
transportation and (if applicable) dehydrogenation costs,
and return. To be periodically reviewed to reflect the cost-
saving effects from the technology developments and
business expansion.
Strike Price：
Market price of counterfactual fuels*
Reference Price：
*At the early stage, natural gas import price (for hydrogen) and
coal import price (for ammonia) are expected to be used.
Proposed supplier support scheme Project evaluation criteria
① Having regard to the S+3E* principles, evaluate the suppliers’
projects from a strategic perspective.
【Examples of evaluation items（TBC）】
ー Production cost and volume
ー Cost reduction potential
ー Contribution to energy security
ー Deliverability etc.
(Ref.) Standards of
different country or area
Life cycle GHG emissions
[kgCO2/kgH2]
RED/RFNBO (EU) 3.4
CertifHy Low Carbon (EU) 4.4
EU taxonomy (EU) 3
Low Carbon Hydrogen Standard
(UK)
2.4
CHPS (US) 4
IRA (US) 0~4
Target by 2030
Well-to-Gate emissions
～3.4kg-CO2/kg-H2*
*Proposed from Japan Hydrogen
Association (“JH2A”)
② Meeting the clean hydrogen standard
Reference Price
Time
Price
refund
Strike Price
IRR
OPEX
CAPEX
Support Scheme (subject to further changes)
- narrowing the price gap between clean hydrogen
(ammonia) and counterfactual fuels for a set
period: variable premium (a type of CfD)
*Japan’s primary energy policy: to achieve a stable (“Energy Security”) and cost-
effective (“Economic Efficiency”) energy supply whilst pursuing environmental
acceptability (“Environment”), without compromising safety (“Safety”) issues.
- To introduce an internationally
comparable carbon intensity
standard
15 years+
support
Published On.
January 4, 2023
Support： Part or whole of the price gap (details TBC) 9
*USD1=JPY130

11. Hydrogen Energy Ministerial Meeting (HEM)
10
⚫ METI and NEDO held the 5th Hydrogen Energy Ministerial Meeting, in cooperation with the IEA, as a
part of Tokyo GX week, on September 26, 2022.
⚫ As the result of the meeting, the chair released the chair’s summary for acceleration and enlargement
of the Tokyo Statement and the Global Action Agenda, including additional goals on the amount of
renewable and low-carbon hydrogen to be produced by 2030 of at least 90Mt H2.
*Archive videos are available via HEM website: https://hem-2022.nedo.go.jp/_en/archive/
Industrial Session: Water Electrolysis
Industrial Session: Hydrogen Industrial
Applications (Steel, Heat and Chemicals)
Industrial Session: Methodology for determining the GHG
emissions associated with the production of hydrogen
Ministerial Speech Session
Ministerial Meeting Session

12. Thank you for your kind attention!!